In 1917, the New York Cotton Exchange was pressured into incorporating price limits into its cotton-futures contracts as a solution for price volatility following the German threat of submarine attacks on freight shipments into European ports.

The dependent variable is the average day-end effect of each firm and the independent variables include average values of trade size, daily share volume, number of trades per day, stock price, firm capitalization and a dummy variable to indicate if the firm trades with a price limit or not.

Because fear of illiquidity and being locked-in to a position, traders rush to cover themselves through active trading; volume would be heavy and the price limit would thus serve as a "magnet" drawing the price closer to it.

In the last year, the home price limits increased by more than 22 percent in Los Angeles County, 28 percent in Riverside County, 31 percent in Ventura County and 11 percent each in San Francisco, San Diego and Sacramento counties.

7 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse exchange, today announced that, effective February 12, pending CFTC approval, daily price limits in Wheat futures and options contracts as well as Mini-sized Wheat futures contracts will be increased from $0.

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